Moody’s revises Argentina to positive

Moody's Investors Service said it changed the outlook on Argentina's Caa1 issuer rating to positive from stable.

The outlook on Argentina's provisional Caa2 foreign legislation and restructured local legislation foreign currency obligations was also changed to positive from stable.

Moody’s said the change is based on its view that the accession of president-elect Mauricio Macri of the Cambiemos ("Let's Change") coalition will raise the probability of credit positive policies being implemented, including arriving at a resolution with holdout creditors, one of Argentina's key credit constraints.

At the same time, the agency affirmed Argentina's Caa1/NP and provisional Caa2 ratings, as well as the Ca rating on the original defaulted bonds. The provisional Caa2 rating on the foreign legislation and restructured local legislation foreign currency obligations reflects the likelihood of higher losses to investors from the continuing default of bonds caught in the ongoing legal proceedings in U.S. courts, thereby differentiating this portion of Argentina's debt from the rest.

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